The Continentalist: Spain’s Moment of Agony, Europe’s Moment of Truth

The Continentalist: Spain’s Moment of Agony, Europe’s Moment of Truth

This weekend, Spain followed Greece, Portugal and Ireland in seeking shelter under the European Union’s rescue umbrella in order to save its banks. Spain, perhaps prouder than the others, tried to avoid by all means a government bailout, fighting hard for a solution that would rescue its hard-hit banks directly. The problem for Madrid is that after two years of crisis, the EU has learned how to hook countries up to its bailout lifeline, but nobody knows how to move them off of it.

The confession of failure might take a harder toll on the Spanish nation than the formal monetary rescue procedure itself: In addition to signaling new and deeper political sacrifices, such as the almost-total loss of what little autonomy the country still has, Spain becomes the first major EU economy to experience this humiliation, a significant psychological blow to national pride.

For a country like Spain, which has linked its recent past and future to Europe, being brought to its knees by that same Europe now hits a nerve, calling into question everything Spaniards had based their hopes on when extricating themselves from the Franco era. Joining the European Union sealed the country’s democratic transition and international normalization, and Spain’s entry into monetary union with the most advanced group of European countries boosted its ever-fragile national self-esteem enormously. So far, in navigating its fiscal and banking crises, Spain has maintained a sense of direction and a clear and ambitious exit horizon. Being under the EU’s bailout umbrella now surely hamstrings this ambition. This is why it was so unacceptable to Spain, until it became unavoidable.

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